Question
Case 1. Tim Corporation reported total purchases of P3,200,000 in its accrual basis financial statement onDecember 31, 2X20. Additional information revealed the following: Accounts payable,
Case 1.
Tim Corporation reported total purchases of P3,200,000 in its accrual basis financial statement onDecember 31, 2X20.
Additional information revealed the following:
Accounts payable, December 31, 2X19 P900,000
Accounts payable, December 31, 2X20 1,250,000
? What is the amount of purchases under the cash basis on December 31, 2X20? _______________
Case 2.
Under the accrual basis, the rental income of Patrick Company for 2X20 is P600,000.
Additionalinformation regarding rental income are presented below:
Unearned rental income, January 1, 2X20 P50,000
Unearned rental income, December 31, 2X20 75,000
Accrued rental income, January 1, 2X20 30,000
Accrued rental income, December 31, 2X20 40,000
? Under the cash basis, how much rental income should be reported by Patrick Company in 2X20?
_________________
Case 3.
Don Mario Company acquires copyright from authors, paying in advance royalties in some cases andothers, paying royalties within 30 days of year-end. Don Mario reported royalty expense of P375,000for the year ended December 31, 2X20.
The following data are included in the corporation's December
balance sheet:
2X19 2X20
Prepaid royalties P60,000 P50,000
Royalties payable 75,000 90,000
? Under the cash basis, what amount of royalty expense should be reported in 2X20 profit or loss?
________________
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started